DVD Sets Look Less Special as Holidays Near

Hollywood Can't Count on Its Cash Cow This Year

LOS ANGELES (AdAge.com) -- The special-edition DVD, long a stuffer of stockings and balance sheets, may leave a lump of coal for Hollywood this holiday season.
According to a home video executive with access to proprietary Nielsen data, sales of special, multidisc editions of TV shows and feature films had been up a whopping 42% for the first half of the year. Credit: Newscom
DVD sales and rentals were down by 2% for the first half of the year, totaling just more than $660 million, according to industry trade organization Digital Entertainment Group. That's on top of a 3% drop in sales and rentals for 2007.

But the DVDs that Hollywood has been making its money with in recent years have been special-edition, multidisc titles, which have come to account for 20% to 25% of the studios' home-video revenue, said Ronald Sanders, president of both Warner Home Video and the Digital Entertainment Group.

Moreover, according to another home video executive with access to proprietary Nielsen data, sales of special, multidisc editions of TV shows and feature films had been up a whopping 42% for the first half of the year.

Drastic drop in sales
But all that is about to change, home video executives say.

During July, August and September came what the executive called the "big drop" -- which resulted in sales of those special-edition discs giving back some 26% of their gains. The exec, who spoke on the condition of anonymity, said that the special-edition category is now up only 17%, and that trend has the industry a bit rattled as it heads into the crucial Christmas retail season.

Amy Jo Smith, executive director of the DEG, noted that those special editions of films or shows proved catnip to studios, "because it gives you a venue to repurpose the product, and the ability to sell it at a higher price point."

Indeed, the special "complete edition" of HBO's "The Sopranos" is the perfect example: Released just this week in time for holiday shoppers, it contains a staggering 33 discs. But while it sports new features such as deleted scenes, some three hours of interviews and even filmed dinners with writers, directors and actors, much of it is recycled: All of the included episodes, as well as the three soundtrack CDs and 25 cast and crew commentaries have already been released in one form or another over the years.

The price tag for such a definitive, if somewhat redundant, collection? $400.

In an interview with Entertainment Weekly about the DVD release, "Sopranos" creator David Chase joked that, weighing in at a full 10 pounds, "you could tie it to someone before you dumped them in the water."

Retailers sinking
But the corpse making the splash might just be the big-box retailers who sell it. Circuit City announced it was filing for bankruptcy protection this week, and Best Buy President Brian Dunn issued a stern statement warning that profits would plunge and that holiday revenue could drop between 5% and 15%.

That's worrisome for the studios. Between now and Christmas, a raft of bigger-ticket DVDs will arrive: Pixar is releasing a three-disc special edition of "Wall-E" Nov. 18; Disney rolls out a three-disc version of "The Chronicles of Narnia" Dec. 2; and Fox unloads a two-disc "Horton Hears a Who" Dec. 9. All titles have sufficient holiday and family appeal that they could still do well.

But studios are also serving up a smorgasbord of dusted-off classics that cash-strapped consumers might already own, or which might make them wonder why they would ever need to: MGM is offering up an 18-disc "Ultimate Pink Panther Collection" on Thanksgiving for $200. Warner is pushing a $60 "ultimate 'Casablanca,'" already one of the most ubiquitous titles around. Universal is even offering up an extended two-disc version of its infamously expensive flop, "Water World," a movie that bombed so badly in 1995 that it was dubbed "Fishtar" by studio accountants in reference to another notorious flop, "Ishtar."

But Marc Rashba, a VP-marketing at Sony Pictures Home Entertainment, is bullish on the industry's chances with the special discs this season.

"The people who do step up and buy these extended cuts tend to be younger, male and may not care about that other stuff," said Mr. Rashba of the faltering economy. "They might not worry as much as their 40-something parents who worry about the mortgage, rent and their 401k's turning to schnitzel. They still enjoy spending money on themselves."

Why wait until Christmas?
Regardless of whether this year's bumper crop of special editions wind up spoiling or selling, Ms. Smith expects that as a response to the year-end DVD deluge, the studios "will be looking at a richer release schedule throughout the calendar year."

In other words, Christmas may come a lot earlier -- and a lot more often -- from now on.